Czech Republic - Investment Climate in the Czech Republic by Enterprise Europe Network - St. Petersburg branch

INVESTMENT OPPORTUNITIES

Investment Climate in the Czech Republic

CZECHINVEST HEADQUARTERS CZECH REPUBLIC

Stepanska 15, 120 00 Prague 2 PHONE: +420 296 342 500 FAX: +420 296 342 502 E-MAIL: fdi@czechinvest.org

www.czechinvest.org

This material is distributed free of charge. Date of issue: November 2010

CzechInvest Investment and Business Development Agency is a government organization under the Czech Ministry of Industry and Trade.

1 Foreword by CzechInvestâ&#x20AC;&#x2122;s CEO 2 Main Reasons to Invest in the Czech Republic 4 Attractive Investment Climate 6 Impressive FDI Results 7 Selected Investors 8 FDI Growth Sectors

10 Financial Support for Investment 12 Well-developed Domestic Supply Base 13 Highly Developed Property Market 14 International Membership 15 Testimonials from Successful Investors 16 CzechInvestÂ´s Services

Last update: November 2010

Foreword by Martin Kocourek,

CzechInvest’s Services

Minister of Industry and Trade Dear Readers,

Our Objectives: -- to advise and support existing and new companies and foreign investors in the Czech Republic -- to support the competitiveness of the Czech economy -- to create a space for communication between foreign investors, the state administration and Czech companies CzechInvest is exclusively authorized to file applications for investment incentives at the competent governing bodies and prepares draft offers to grant investment incentives. Its task is also to provide potential investors current data and information on the business climate, investment environment and investment opportunities in the Czech Republic.

Martin Kocourek Minister of Industry and Trade

CzechInvest’s Services

Martin Kocourek Minister of Industry and Trade

-- Full information support -- Full information assistance -- Tailor-made visits -- Maximisation of networking capacity -- Handling of investment incentives -- Access to EU structural funds -- Business properties identification -- Business infrastructure development -- Supplier /JV/ aquisition partner identification

Foreword by Miroslav Křížek, Chief Executive Officer of CzechInvest Dear Readers,

All of CzechInvest’s services are free of charge.

CzechInvest’s prestigious awards -- Best Practices in Promotion 2004, presented by the steering committee of the World Investment Forum -- WAIPA Awards 2003 – Best Advertisement by an IPA (third place) -- Best Investment Promotion Agency in the EU Accession Countries of 2002 -- European Investment Promotion Agency of the Year 2001 -- European Investment Promotion Agency of the Year 2000

CzechInvest, the Investment and Business Development Agency, is an agency of the Ministry of Industry and Trade. Established in 1992, the agency contributes to attracting foreign investment and developing domestic companies through its services and development programmes. CzechInvest also promotes the Czech Republic abroad and acts as an intermediary between the EU and small and medium-sized enterprises in implementing structural funds in the Czech Republic. Our systems of quality management and information security were certified by Quality Austria and Certification & Information Security Services in accordance with ISO 9001:2000 and ISO 27001:2005.

In recent years the Czech Republic has consistently placed among the champions in attracting foreign direct investments not only in Central and Eastern Europe, but also at the global level. Czechs are well known for their emphasis on quality, desire to improve familiar processes and ability to achieve maximum productivity. The government is endeavouring to support the business environment in the Czech Republic through persistent restriction of unnecessary regulations, simplification of the tax system and prudent policy which fosters a system that is clear, stable and predictable over the long term. Though the global economy has recently grappled with problems on an unprecedented scale, the Czech Republic has managed to come through these difficulties with flying colours. In recent years the country has been attracting an ever greater share of investments in business support services, research and development, software development and technologically demanding manufacturing. Investors particularly value the Czech Republic’s well-functioning labour market and the advanced skills and professionalism of their employees here. I ranked the area of technical education among the priorities of the Ministry of Industry and Trade, as educated professionals form the basis for maintaining the competitiveness of our economy. Besides the benefits of its favourable business environment, the Czech Republic is able to enhance investments with investment incentives and aid from the European Union or from other national sources. With their projects and subsequent expansions, hundreds of the largest global corporations have already expressed their appreciation of the Czech Republic’s qualities. I wish you much success in the Czech Republic.

Miroslav Křížek Chief Executive Officer, CzechInvest

CzechInvest, part of the Ministry of Industry and Trade of the Czech Republic, offers investors a full range of services which they may need when entering the Czech market and when subsequently conducting business here. We prepare detailed information on the Czech investment environment and provide assistance with obtaining investment incentives and aid from European Union sources. At the same time, we are able to seek out the most advantageous locations for your business, and you can confidently turn to us for help when selecting local suppliers, for example. The Czech Republic offers a stable economic and political environment, a perfect location in the heart of Europe, solid transportation and telecommunications infrastructure, and motivated employees. CzechInvest is here to show you the fastest and simplest path to fully utilising all of these advantages. The Czech Republic regularly places at the top of investment-attractiveness rankings. Hundreds of the world’s most important companies have already invested billions of euros in their Czech subsidiaries, which in turn have achieved a high level of success. An ever greater share of new investments comprises expansions of firms that are already conducting business here. In addition these subsequent investments mostly involve sophisticated manufacturing, services or science. And there is no greater evidence of the quality of the Czech business environment than the ever increasing reinvestments of companies that already know us well. The longer you are in the Czech Republic, the more your business will thrive. Miroslav Křížek Chief Executive Officer

Main Reasons to Invest in the Czech Republic Czech educational system meets the needs of a competitive economy (year 2010)

7 7.15 6

6.73

6.38

5.66

5.58

5.56

5.35

5.05

4 3

3.46

3.14

2 1 0 Austria

France

Germany

Hungary Czech Japan Republic Slovak Republic UK USA Poland

IMD Executive Opinion Survey based on an index from 0 to 10 Source: IMD World Competitiveness Online 1995-2010

100

87 85 71

-- Safe investment environment -- Skilled workforce -- High share of secondary and tertiary education within the population -- Favourable labour costs and price stability -- Central location in Europe -- Compact and high-quality infrastructure -- Transparent system of investment incentives -- Strong focus on R&D -- Stable social and political system -- EU membership -- Mentality, culture and attitudes close to western countries -- Enviable life style

Well educated and skilled labour force

Population that had attained at least upper secondary education in 2008 (% by age group 25-64)

Poland Czech Spain France USA OECD Republic Average Slovak Rep. Estonia Germany Italy Portugal UK

The Czech educational system meets the needs of a competitive economy, according to the 2010 World Competitiveness Book published by the Institute for Management Development. The Czech Republic can provide manufacturers with impressive productivity levels and highly skilled labour. According to a 2008 OECD study, the Czech Republic has a very strong position regarding the percentage of students graduating in engineering, manufacturing and construction fields. In the year 2009/2010, there were more than 80,000 technically orientated students at Czech universities. The number of university students increased from 118,000 in 1990/91 to 389,231 in 2009/2010, due not only to changes in the education system but also to a demographic bulge of 18-26-yearolds that represent a promising group of potential employees for foreign investors. According to the last Eurobarometer survey 61% of Czechs are able to speak at least one foreign language (predominantly English and German).

Respondents able to participate in a conversation in another language than their mother tongue

Proven Research and Development Capabilities

“Lonza Kourim Czech Republic is the leading technology and manufacturing service provider for biopharmaceuticals in Eastern Europe.”

The Czech Republic spends more resources on research and development than many of its competitor countries. Over the past ten years, the Czech Republic’s spending on R&D has increased from 0.95% of GDP to 1.54%. Many multinationals are running Czech R&D or design centres, including Panasonic, Honeywell, Mercedes-Benz, Motorola, Rockwell Automation and Visteon. Czech scientists are behind some of the world’s well-known discoveries and patents, such as soft contact lenses, polarography – a Nobel-prizewinning method of quantitative analytical measurement, and the anti-HIV drugs cidofovir (Vistide®) and tenofovir (Viread®), to name but a few.

Stephan Borgas, CEO of Lonza

69 67

61 57

51 42

30 20 10 0 Poland Finland Germany Czech Republic

EU25

Source: European Commission, Eurobarometer, 2006

“We are very pleased with our decision to locate our project in the Czech Republic. It is a developed country and our Czech colleagues and employees are technically erudite, flexible and hardworking.” Kim Eok-Jo, president, Hyundai Motor Manufacturing Czech

(%)

“How can we characterize the Czech software engineer? Based on my experience working with international teams from China to the Bay Area, I can say that Czech software engineers are as good as their western counterparts, regardless of whether we look at innovation, efficiency, discipline, or experience, and they usually work harder. The roots of this healthy environment lie in the Czech Republic’s high-quality education system, which provides the heterogeneous skill sets of the country’s software engineers.” Radovan Janecek, Chief Architect, BTO, HP Software R&D

Nine out of ten Czechs aged 18 to 59 speak at least one foreign language, and their knowledge is rapidly improving, according to a survey conducted by AUGUR Consulting for CzechInvest in 2008-2009. The survey shows a 13% increase in language skills in comparison with the results of similar research conducted six years ago.

Source: Education at a Glance, OECD Indicators, 2010

Testimonials from Successful Investors

France Hungary

“The Czech Republic offers a highly skilled and very efficient workforce with a strong, technically oriented educational background and a large number of engineering graduates. The country has a rich industrial history and a university system that is highly recognized.” Jaroslav Dolezal, Honeywell National Executive for the Czech Republic

“When Rolls-Royce made the decision to enter the Central and Eastern European market in the mid 1990s, the Czech Republic was the natural choice. Prague had the infrastructure and position that we needed for establishing our headquarters for Central and Eastern Europe. Today, from Prague we manage our business in nineteen countries across the territory, the business encompassing civil aerospace, defence aerospace, marine and civil nuclear.” Paul Kaye, Managing Director of Rolls-Royce Central and Eastern Europe

International Memberships

Czech Technology Days

Students and graduates at technical universities

The Czech Republic was the first CEE country to be admitted into the OECD. The country is a member of NATO and is fully integrated into other international organizations such as the WTO, IMF, EBRD and WIPO (World Intellectual Property Organization). The Czech Republic joined the EU on 1 May 2004. The Czech Republic has been a part of the Schengen area since 21 December 2007.

2001/2002 2002/2003 2003/2004 2004/2005 2005/2006

students graduates

Customs Obligations

41,567

48,302

52,070

56,712

3,941

4,257

4,731

5,485

6,397

2006/2007

2007/2008

2008/2009

2009/2010

62,975

65,562

66,304

80,245

8,397

11,876

14,198

17,109

students

Starting on the first day of EU membership, routine customs checks of goods being moved across internal borders, i.e. the common border with other member states, were abolished. Since the Czech Republic does not have an external EU border, routine checks of goods being moved across the state border for customs and tax purposes are conducted only at the main international airports in Prague, Brno, Karlovy Vary and Ostrava. Goods are freely transported across internal EU borders.

37,333

graduates

Favourable Labour Costs

*Engineering, manufacturing and construction graduates Source: Institute for Information on Education, 2010

Labour costs per hour in 2009 USD

Visa Requirements

The agency CzechInvest, and other partners, established five years ago the tradition of bilateral meetings called the Czech Technology and Innovation Days. The aim of these seminars is to provide an overview over the structure of Czech R&D entities, of the respective policy principles, of the Czech Government R&D priorities and programmes, as well as of important achievements and prospects. The main goal is to facilitate direct contacts and networking between the research communities, policy makers and business leaders. So far over 20 seminars with 17 countries were achieved, details can be found on www.czechtechnologydays.org.

One of the main attractions of the Czech economy is its skilled and well-educated workers available at a fraction of the cost of those in western economies. Over the past five years average annual wage has grown around 6% but it is coming from much lower base compared to Western Europe. Differences in remunerations among regions reach approx. 20%. Traditionally, employees in Prague are paid more than in other regions (currently 25% above Czech average).

Czech Republic 13.19 Japan

Central Location in Europe and Advanced Infrastructure

23.41

United Kingdom

24.17

France

The Czech Republic has a strategic location in the centre of Europe with very good access to established western and emerging eastern markets. Prague is only a two-hour flight from most other European capitals. The significance of the Czech Republic as a transit hub has grown since the Czech Republic became a member of the EU Single Market.The road and motorway network (total 55,654 km) is already one of the densest in Central and Eastern Europe and several rail modernization projects are currently underway to link the Czech Republic with the pan-European network of high-speed railways (total 9,588 km).

30.59

Germany

40.36

Source: The Economist Intelligence Unit, 2010

Central location in Europe

Infrastructure in the Czech Republic

Existing expressways

End of 2011

Planned highways

International roads Railway highspeed corridors

M ER

Helsinki

Oslo Stockholm

Berlin Hamburg

Leipzig Berlin Wolfsburg Erfurt Kassel Teplice

Česká Lípa

Kladno

Karlovy Vary

Dublin

Kolín

PRAGUE

Beroun

Budapest

Barcelona

Milan

Istanbul

Klatovy

Písek Strakonice

Prachatice

ČESKÉ BUDĚJOVICE

Jindřichův Hradec

Kroměříž

Blansko Vyškov

BRNO

Vsetín

Kosice Trnava

Zlín Uh. Hradiště

Hodonín Znojmo Břeclav

Český Krumlov

Vienna

Y Linz Steyr Graz

Source: CzechInvest, 2010

Nový Jičín

Prostějov

Jihlava

Tábor

Frýdek Místek

Athens

Bielsko - Biala Cracovie

Karviná

OLOMOUC

Havlíčkův Brod Žďár n. S.

Třebíč

Rome

Šumperk

OSTRAVA

Pelhřimov

Domažlice

Munich Ingolstadt Stuttgart Torino

Bern

Madrid

Ústí n. O.

Bratislava

Vienna

Lisbon

PARDUBICE

Opava

Svitavy Příbram

Marseille

Bruntál

Benešov

PLZEŇ

Tachov

Brussels Paris

HRADEC KRÁLOVÉ

Warsaw

Munich

Warsaw

Jeseník

Source: Road and Motorway Directorate of the Czech Republic, 2010

AUSTRIA

Bratislava Györ

VA K

Amsterdam London Berlin

Náchod

Nymburk

Rakovník

Sokolov Cheb

LAN

Trutnov

Jičín

Mělník

Louny

Würzburg Frankfurt

Semily Mladá Boleslav

Jablonec n. N.

ÚSTÍ N. L.

Most Chomutov

Copenhagen

Wroclaw Gliwice

Liberec

Děčín

Non-EU countries Since 1 January 2009, an integrated residency and work permit (Green Card) system has been in effect for employees from 12 non-EU/EEA countries. Citizens from these countries can now apply for a Green Card when seeking work in the Czech Republic instead of having to obtain a residency permit and work permit in separate proceedings. The new Green Card process is much simpler and faster, with a maximum overall processing time of 90 days.

EU member countries The free movement of people has been agreed between all current EU member countries plus Norway, Iceland, Liechtenstein and Switzerland. This means the possibility of working in all these countries without a visa or work permit. Since 1 May 2004, EU citizens are allowed to stay and work in the Czech Republic without visas or work permits. They are only required to register with the local office of the Foreigners’ Police.

Highly Developed Property Market

Attractive Investment Climate

Czech credit ratings

Rating Agency

Rating (August 2010)

Moody’s

Standard & Poor’s

Fitch IBCA

A+

Source: Czech National Bank, August 2010

The Czech Republic is a fully-fledged parliamentary democracy and one of the most advanced new EU members. Its economic policy is consistent and predictable. An open investment climate has been a key element of the Czech Republic’s economic transition. The Czech Republic has attracted a large amount of foreign direct investment (FDI) since 1990, making it the most successful transition country in terms of FDI per capita. The country’s investment grade ratings from international credit-rating agencies and its early membership in the OECD testify to its positive economic fundamentals.

Competitive Advantages of the Czech Republic According to the 2010-2011 Global Competitiveness Report published by the World Economic Forum, the Czech Republic ranks 36th among 139 world economies in competitiveness (Rank/139).

The Czech Republic tops CEE countries in the competitiveness ranking of world economies

5.63

5.56

5.48 4.57

4.51

4.42

4.33

4.25

1 0 Singapore

Switzerland

Sweden

Hungary

Poland

Czech Republic

Slovakia

Slovenia

Source: World Economic Forum, Global Competitiveness Report 2010-2011

Standard rate of corporate income tax (%)

-- Quality of the educational system (34) -- Quality of math and science education (25) -- Internet access in schools (24) -- Capacity for innovation (24) -- Quality of scientific research institutions (21) -- Co-operation of universities and industry (29) -- Company spending on R&D (25) -- FDI and technology transfer (15) -- Prevalence of trade barriers (12) -- Pay and productivity (22) -- Local supplier quality (17) -- Quality of electricity supply (18) -- Quality of air transport infrastructure (17) -- Mobile telephone subscribers (19) -- Etc.

35 30

Investment Protection

Rents in industrial premises in regions €/m2/month Rent €/m2/month

Region

Central Bohemia

3.00–4.50

Hradec Kralove

3.50–4.00

Karlovy Vary

3.75–4.25

Liberec

3.50–4.00

Moravia-Silesia

3.00–4.50

Olomouc

3.75–4.25

Pardubice

3.50–4.00

Plzen

2.75–4.50

Prague

3.50–4.50

South Bohemia

3.50–4.50

South Moravia

3.75–4.75

Usti

3.75–4.25

Vysocina

3.75–4.25

Zlin

3.75–4.25

Source: CzechInvest, 2010

A class headline rents €/m2/month

Location

Prague City Center

2008

2009

Q2 2010

21–23

21–22

21–22 15–17.5

Prague Inner City

15–17.5

Prague Outer City

13–14.5

12–14

Brno

12.5–16

12.5–15

12.5–15 10–12.5

11–13.75

10–12.5

Plzeň

9.5–11

10.5

Olomouc

9–11.5

9–10

Hradec Králové

9–10.5

9–10

Ústí nad Labem

8.5–10

9–10

Ostrava

Source: DTZ, 2010 26

24 21

10 5 0 2003

2004

2005

2006

2007

2008

2009

2010

The Czech Republic is a member of the Multilateral Investment Guarantee Agency (MIGA), an international organization for protection of investments, which is part of the World Bank-IMF group. The country has signed a number of bilateral treaties which support and protect foreign investments, for example with the United States, Germany, the UK, France, Austria, Switzerland, Italy, Belgium, Luxembourg, the Netherlands, Finland, Norway, Denmark and China. The Czech Republic has also concluded agreements for the avoidance of double taxation.

Thanks to the continued interest of real estate investors, the Czech Republic has a highly developed and dynamic real estate market. The availability of space for production facilities has been boosted by a major government programme designed to support the development of municipal industrial properties and zones.

Our Services -- Assistance in gaining financial assistance from public resources (both EU and state aid) -- Provision of information on the real estate market -- Preparation of offers of property according to your requirements – selection from an extensive database of business properties for industry and business support services -- Arranging of contacts with property owners, state administrative bodies and local authorities -- Organization of visits to recommended sites -- Assistance with preparation and financing of strategic projects (industrial zones) focused on business real estate -- Promotion of business real estate -- Offer of brownfields as investment opportunities at www.brownfieldy.org

Supported Types of Business Properties -- Industrial zones and business parks -- Production halls -- Technology centres -- Science and technology parks -- Office buildings and administrative facilities

More than 91 Industrial Zones and Parks

If you are interested in offering your properties through the database of business properties, just fill out the registration form which you will find on CzechInvest’s website together with instructions for completing it.

17 15 12

1 Český Krumlov, 2 Prachatice, 3 Písek, 4 Blatná, 5 Domažlice, 6 Stod,

9 20

17 Rumburk, 18 Liberec, 19 Slaný, 20 Tuchlovice, 21 Kladno, 22 Unhošť, 23 Zdice, 24 Ž ebrák, 25 Zlatníky-Hodkovice, 26 Poříčany, 27 Zruč nad 7

Boleslav, 33 Jičín (2)*, 34 Hořice, 35 Vrchlabí, 36 Trutnov, 37 Kvasiny,

31 26 Praha 25

29 28

39 42

55 Brankovice, 56 Hodonín (2)*, 57 Staré Město, 58 Zlín, 59 Vsetín,

65 64

49 50

60 Holešov, 61 Valašské Meziříčí, 62 Hranice, 63 Velká Bystřice (2)*,

53 1

69 Ostrava (2)*, 70 Frýdek - Místek (2)*, 71 Nošovice, 72 Třanovice, 73 Třinec, 74 Český Těšín, 75 Karviná, 76 Krnov * Number in brackets next to the names of municipalities represent the total Source: CzechInvest, 2010

61 59 58

64 Olomouc (3)*, 65 Uničov, 66 Š umperk, 67 Mošnov, 68 Paskov,

62 63 60

46 45

40 67

38 41

50 Brno (2)*, 51 Pohořelice, 52 Mikulov, 53 Velké Pavlovice, 54 Vyškov (2)*,

number of supported zones in the given location.

Meziříčí, 47 Ž ďár nad Sázavou, 48 Bystřice nad Pernštejnem, 49 Blansko,

38 Chrudim, 39 Svitavy, 40 Moravská Třebová, 41 Ž dírec nad Doubravou, 42 Havlíčkův Brod, 43 Pelhřimov, 44 Kamenice nad Lipou, 45 Třebíč, 46 Velké

19 21 22 23

Sázavou, 28 Kutná Hora (3)*, 29 Kolín, 30 Velim, 31 Nymburk, 32 Mladá

12 Chomutov, 13 Most, 14 Lovosice (2)*, 15 Přestanov, 16 Ú stínad Labem, Source: CzechInvest, 2010

7 Plzeň (2)*, 8 Ostrov, 9 Podbořany (2)*, 10 Ž atec (2)*, 11 Klášterec nad Ohří,

18 16

75 74

72 70 71

Well-developed Domestic Supply Base

Supplier Databases CzechInvest’s fundamental tool for seeking out suitable business partners is comprised of its sector databases of Czech companies. These databases contain more than 3,000 high-quality records with a broad scope of information on Czech suppliers interested in long-term cooperation with foreign partners. The databases are regularly updated and supplemented according to the requirements of foreign companies, and contain companies from the following sectors:

Supplier Forums Does your company operate in the manufacturing industry, and are you considering the possibility of using Czech suppliers and you would like to know what they have to offer? If so, you have come to the right place: CzechInvest organises tailor-made supplier forums to which we invite Czech firms according to our clients’ needs. All you have to do is contact us and explain your supplier requirements. We’ll take care of the rest.

-- Aerospace -- Automotive -- Electronics and electrotechnics -- ICT -- Subcontracting Plastics -- Subcontracting Metal -- Materials and packaging -- Engineering -- Energy -- Healthcare, pharmacy and biotechnology

Basic Data Key information on the Czech Republic

Area

78,864 km2

Population

10.5 million

Labour

5.7 million

Capital

Prague

Language

Czech

Major cities (population)

Prague (1,249,315), Brno (371,248), Ostrava (335,073), Plzen (185,715), Olomouc (231,855), Usti nad Labem (121,478), Liberec (169,783), Hradec Kralove (163,037), Pardubice (167,629), Ceske Budejovice (186,931)

Time zone

Source: Czech Statistical Office, June 2010

Czech economic indicators

Indicators

GDP (constant prices 2000, %) GDP per capita (PPS / EU-27)

http://suppliers.czechinvest.org Email: suppliers@czechinvest.org

Joint Ventures & Mergers & Acquisitions Invest in Czech companies The Czech company market offers a great opportunity to expand a footprint in a competitive location with favourable cost structure and skilled labour force. After a boom in the manufacturing and IT sector over the last several years, many Czech owners are considering their factory growth in cooperation with a strong foreign partner or selling the equity and retiring.

Through filtering by sector, technology, products, region, company name and by full text, the databases enable fast and simple searching for suitable suppliers and partners from the Czech Republic.

2004

2005

4.5

2006

2007

2008

2009

2010 Forecast

2011 Forecast

6.3

6.8

6.1

2.5

-4.1

2.2

2.0

16,300 17,100

18,200

19,900

20,100

18,900

19,400

20,000

Long-term interest rates (government bonds)

4.75

3.51

3.78

4.28

4.55

4.67

3.7

3.9

Trade balance (% GDP)

-0.5

2.0

3.4

2.8

5.0

5.1

5.9

Average inflation rate (%)

2.8

1.9

2.5

2.8

6.3

1.0

1.5

2.2

537.4

514.3

474.8

392.8

324.6

465.6

525

508

9.2

8.97

8.13

6.62

5.44

7.97

9.0

8.7

Unemployment (avg., thousand persons)

CzechLink

GMT +1, summer time GMT +2

Unemployment rate (avg., %)

Source: Ministry of Finance, October 2010

EU legislation was adopted in preparation for EU accession. Commercial, accounting and bankruptcy laws are compatible with western standards. The Czech crown is fully convertible. All international transfers (e.g. profits and royalties) related to an investment can be carried out freely and without delay. Foreign legal entities from EU and other states may acquire real estate in the Czech Republic without any restrictions and under the same conditions as Czech legal entities. Hence, the original legal requirements as to the location of the company or an establishment of a branch in the Czech Republic and entitlement to conduct business in the Czech Republic were lifted.

Impressive FDI Results

Cumulative FDI inflow by sector 1993 – H1 2010

Inflow of Foreign Direct Investment

Eligibility criteria

(Total 83.90 billion USD)

Trade, hotels and restaurants 12% Transport, storage and communications 13%

Real estate and business activities 18%

Electricity, gas, and water supply 5% Other 2%

Financial intermediation 24%

Manufacturing 26%

Source: Czech National Bank, 2010

The Czech Republic is one of the most successful CEE countries in terms of attracting foreign direct investment. Over 173,000 Czech firms across all sectors are now supported by foreign capital. According to the Czech National Bank, a total amount of EUR 69.1 billion worth of FDI has been recorded since 1993.

Stock of inward foreign direct investment per capita (USD)

2006

2007

Czech Republic

7,800.4

9,989.4

Hungary

5,654.1

6,224.9

Poland

3,297.8

Romania Slovakia*

2008

In order to strengthen the Czech Republic’s position as an information hub in Central Europe, the Czech government supports investments in business support services centres. These are defined as centres engaged in selected activities with close ties to information technologies and a distinct international focus. ICT development and implementation centres, high-tech repair centres and shared services centres are supported via the ICT and Business Support Services Programme.

Statistics – ICT and Business Support Services (app. data)

ICT and Business Support Services Programme, Call III, open till October 15, 2010 Form of support

7,308.5**

172 projects received the decision about subsidy

Cash subsidy

5,218.3**

Investment

3,514.2

3,895.3**

Newly created jobs

8,388.0

8,665.2**

2009

2010

11,189.7

11,460.7

11,834.9**

6,908.3

7,075.4*

4,680.1

4,286.4

4,789.9

2,110.2

2,923.8

3,194.4

7,031.7

7,456.9

8,405.9

Germany 22% Austria 14%

Business Support Services Centres

According to an Economist Intelligence Unit database, the Czech Republic has consistently attracted a high rate of foreign direct investment per capita since 2000, which confirms the country’s strong attractiveness for foreign investors.

Cumulative FDI inflow by country 1993 – H1 2010

Other 27%

The project must be implemented in the Czech Republic outside the territory of Capital City of Prague.

The introduction of investment incentives in 1998 stimulated a massive inflow of FDI into greenfield projects. Amendments to the investment-incentives legislation have further eased the attraction of new investments.

(Total 83.90 billion USD)

Japan Sweden 1% 1% United Kingdom 1% Belgium 4% Switzerland 6% United States 5% France 7%

Minimum investment: large enterprise EUR 400,000, small or medium sized enterprise EUR 200,000

EUR 20.3 mil.

intangible assets

Source: ICT and Business Support Services Programme, Call I and Call II

Eligibility criteria

Services Surpass Manufacturing

Source: Czech National Bank, 2010

Up to 60% of two years wages or 60% of costs of long term tangible and

2,883

*Estimates, **Forecasts Source: Economist Intelligence Unit, July 2010

Netherlands 12%

Up to EUR 4-6 mil. (depending on region)

Minimum investment: EUR 118ths/EUR 39ths/EUR 20ths (Large/Medium/Small enterprise) Min. number of newly created jobs:

More value-added investment projects

1994

2009 Technology centres 45%

Manufacturing 19%

The structure of FDI inflow into the Czech Republic has been changing substantially and the trend is expected to strengthen in the coming years. The Czech Republic is experiencing the introduction of a new, very valuable type of economy, which is based not on the traditional processing of resources, but on the knowledge of the country’s people. Last year investments in research and development and business support services in the Czech Republic outweighed those in manufacturing projects for the first time.

ICT Development and Implementation Centre: 10/5/3 (Large/Medium/Small enterprise) High-tech Repair Centre: 25/15/5 (Large/Medium/Small enterprise) Shared Services Centre: 40/20/10 (Large/Medium/Small enterprise) The project must be implemented in the Czech Republic outside the territory of Capital City of Prague

Performance of Foreign Companies in the Czech Republic Manufacturing 100%

Source: CzechInvest, 2010

Business support services 36%

The Czech Republic hosts over 73,000 foreign companies of all sizes. Famous multinational companies such as ABB, Continental, DANONE, Ford, Panasonic, Nestlé, IBM, DHL, Astra Zeneca, Rockwell, Procter & Gamble, Renault, Siemens, Tyco, Honeywell, and Volkswagen have significant subsidiaries in the Czech Republic. *Used exchange rate CZK/EUR 25.5

Foreign-owned companies are transforming the Czech economy: -- 60.9 % of the workforce in industry (Q1 2010) -- 74.7 % of sales in industry (Q1 2010) -- 39.6 % of exports in industry (Q1 2010) Source: Survey of the Czech Economy, Ministry of Industry and Trade, 2010

Financial Support for Investment

Selected Investors

Investment Incentives and Other Business Support Measures

The change in the structure of foreign direct investment shows the new trend in the Czech Republic. The number of demanding projects in the fields of research, development and business support services is rapidly increasing. New investors as well as those companies that formerly only came with a production programme are now transferring their higher-added-value development activities (technology centres or business support services centres) to the Czech Republic.

The Czech Republic offers both new and existing investors support covering up to 60% of costs associated with investment projects in manufacturing, technology centres and business support services. Aid is provided in all regions, with the exception of Prague.

Manufacturing Sector

Selected Investors in the Czech Republic

Sector

Investor

Country of origin

Technology Centres

Panasonic

Japan

Honeywell

USA/Germany

Valeo

France

Rockwell

USA

IBM

USA

Hewlett-Packard

USA

SUSE Linux

USA

HSBC Bank

DHL

Germany

Accenture

USA

Exxon Mobil

USA

Monster

USA

Lufthansa

Germany

Honeywell Aerospace

USA

GE Aviation

USA

Latecoere

France

Hyundai

Korea

Minimum investment: EUR 2-4 mil. depending on the region's unemployment rate

Volkswagen

GERMANY

Half of the minimum investment must be financed by the equity of the investor

Toyota/PSA

Japan/France

60% of total investment must go into machinery

Robert Bosch

Germany

Aid for manufacturing projects is provided according to the Act on Investment Incentives and offers the following incentives:

Forms of incentives

Statistics–manufacturing

Software & ICT services Tax incentive

608 projects received the decision on investment incentives Investment

Full corporate tax relief for up to 5 years for new companies Partial tax relief for up to 5 years for existing companies

EUR 18,203.55 mil.

Newly created jobs

Job-creation grants

131,037

Financial support for creation of new jobs in selected regions

Business Support Services

(up to EUR 2,000 per new job) Training and re-training grants

Financial support for training and re-training of new employees in selected regions (up to 45% of eligible training costs)

Source: CzechInvest, June 2010

Aerospace Industry

Eligibility criteria Advanced Automotive

Machinery must be new

Industrial Machinery,

Ingersoll Rand

USA

No works may be started prior the issuance of Confirmation of Project Registration at CzechInvest

Equipment and Tools

Siemens

Germany

Honeywell

USA

Daikin

Japan

Baxter

USA

Lonza

Switzerland

TEVA

Israel

Sanofi-aventis

France

Panasonic

Japan

ON Semiconductor

USA

Foxcom

Taiwan

TYCO Electronics

USA

AU Optronics

Taiwan

Darfon

Taiwan

The project must be implemented in the Czech Republic outside the territory of Capital City of Prague.

Life Sciences

Technology Centres EE/Electronics

In order to strengthen the Czech Republic’s position as a technology hub in Central Europe, the Czech government supports investments in development activities. Technology centres are defined as centres engaged in research, development and innovation of high-tech products and technologies if there is expectation that the output of such centres will be transferred and used in production. Aid for technology centres is provided via the Potential Programme.

Cleantech

Source: CzechInvest, 2010

Potential Programme, Call III, open till September 30, 2011 Form of support

Statistics – technology centres

180 projects received the decision about subsidy Investment

Source: Potential Programme, Call I and Call II

EUR 175.2 mil.

Cash subsidy

Up to EUR 4-8 mil. (depending on region) Up to 60% of the costs of long term tangible and intangible assets

8 9

FDI Growth Sectors

CzechInvest focuses on supporting those sectors in which it sees significant potential for development. Below are highlights of the priority economic-growth sectors of the Czech Republic. For each of these sectors, CzechInvest has a specialist who can provide investors with in-depth sector-specific information.

Software & ICT Services The Czech Republic has emerged as Europe’s top location for offshoring and outsourcing of IT services. Repeatedly recognized by various researchers this fact is confirmed by the strong inflow of high-value-added projects of the world’s top IT companies and is fuelled by the country’s tradition of excellence in technical fields.

Business Support Services Within the business support services sector two main types of activities are supported – shared services centres (in-house centres of excellence – finance/accounting, HR, IT and other activities, BPOs, KPOs and LPOs) and high-tech repair centres for products and technologies. The Czech Republic has a mature services market with over 50 projects from companies such as DHL, Accenture, IBM, Motorola, Schneider Logistics, Johnson & Johnson and many more. The Black Book of Outsourcing’s survey from 2008 ranked the Czech Republic as the most attractive location for investment in the BPO sector in Europe and fifth worldwide.

Aerospace Industry In comparison with other countries, the Czech Republic progressively advanced from lower categories of aerospace production to more sophisticated products such as commercial aircraft and military jets over more than 90 years. Our aerospace heritage has brought us extensive knowledge derived from the results of numerous aircraft tests. This has contributed to building a strong aerospace culture in which generations of designers have been able to acquire and develop advanced skills. These capabilities are valued by Honeywell Aerospace, GE Aviation and other companies operating in the Czech Republic. The Czech aerospace sector includes the following areas: aviation, space, UAV, MRO and other related branches.

Advanced Automotive The Czech Republic is home to one of the world’s highest concentrations of automotiverelated manufacturing, design and R&D activity, making the automotive sector one of the leading industries in the national economy. It accounts for more then 20% of manufacturing output, almost 8% of national GDP and more than 120,000 directly related jobs. At full capacity, three major production plants – Š koda, TPCA and Hyundai – produce more than 1,200,000 cars annually and the presence of almost half of the world’s top fifty leading component manufacturers underscore the sector’s importance.

Industrial Machinery, Equipment and Tools The continuously increasing competitiveness of Czech companies in this sector is particularly due to their ability to cover a wide range of activities, from construction and design to production, and to the comprehensiveness of their products and supplementary services. The sector accounts for more than 13% of revenues from the sale of products and services of the manufacturing industry, and almost 7% in added value. The sector maintains its strong position as a traditional exporter – between 80% and 90% of the sector’s output is exported.

Life Sciences Life sciences have become a sector of global significance due to its potential in the area of solving the biggest problems facing modern society and improving the quality of life. Thanks to a strong research base, well-educated workforce and favourable business environment, this strategic sector is developing very quickly in the Czech Republic. Global companies such as Baxter, Lonza, Otsuka Pharmaceutical, TEVA and SanofiAventis are developing their operations in the Czech Republic.

Electrical Engineering/Electronics More than anything else, the Czech EE/electronics sector is based on a long tradition and highly qualified employees. The industry is evenly spread around the country and employs nearly 210,000 people with total revenues of EUR 19.7 billion (in 2007). The country's manufacturing portfolio includes practically all branches of EE/electronics, from electric drives/engines and power supply to consumer electronics and microchips. The dynamic growth of the electronics industry and great references from investors prove Czech Republic’s status as a renowned investment destination.

Advanced Renewable Energy The Czech Republic has great potential in the area of renewable energy sources and alternative biofuels. This market segment is not yet saturated and can offer a welleducated and experienced workforce. Moreover, financial support is available from European programmes. Solar energy, renewable energy from biomass and alternative biofuels offer opportunities for long-term profitable investment in the Czech Republic.

Nanotechnology The nanotechnology sector plays an important role in many major sectors, such as mechanical engineering, electronics, biotechnology, medicine, power generation, and environmental protection, to name just a few. Over the past decade, this sector explosive development in the Czech Republic has undergone. Several academic and private entities have achieved tangible successes and hold patents on new developments in the area of nanotechnology. Companies such as CPN, Crytur, Elmarco, and Optaglio, among others, have achieved not only better-than-average results but they are capable of competing on the global market. The sector is supported by various initiatives, such as Nanotechnology for Society, which comprise a platform for universities and the industrial sphere that will guarantee long-term development in this field.

8 9

FDI Growth Sectors

Financial Support for Investment

Selected Investors

Investment Incentives and Other Business Support Measures

Manufacturing Sector

Selected Investors in the Czech Republic

Sector

Investor

Country of origin

Technology Centres

Panasonic

Japan

Honeywell

USA/Germany

Valeo

France

Rockwell

USA

IBM

USA

Hewlett-Packard

USA

SUSE Linux

USA

HSBC Bank

DHL

Germany

Accenture

USA

Exxon Mobil

USA

Monster

USA

Lufthansa

Germany

Honeywell Aerospace

USA

GE Aviation

USA

Latecoere

France

Hyundai

Korea

Minimum investment: EUR 2-4 mil. depending on the region's unemployment rate

Volkswagen

GERMANY

Half of the minimum investment must be financed by the equity of the investor

Toyota/PSA

Japan/France

60% of total investment must go into machinery

Robert Bosch

Germany

Aid for manufacturing projects is provided according to the Act on Investment Incentives and offers the following incentives:

Forms of incentives

Statistics–manufacturing

Software & ICT services Tax incentive

608 projects received the decision on investment incentives Investment

Full corporate tax relief for up to 5 years for new companies Partial tax relief for up to 5 years for existing companies

EUR 18,203.55 mil.

Newly created jobs

Job-creation grants

131,037

Financial support for creation of new jobs in selected regions

Business Support Services

(up to EUR 2,000 per new job) Training and re-training grants

Financial support for training and re-training of new employees in selected regions (up to 45% of eligible training costs)

Source: CzechInvest, June 2010

Aerospace Industry

Eligibility criteria Advanced Automotive

Machinery must be new

Industrial Machinery,

Ingersoll Rand

USA

No works may be started prior the issuance of Confirmation of Project Registration at CzechInvest

Equipment and Tools

Siemens

Germany

Honeywell

USA

Daikin

Japan

Baxter

USA

Lonza

Switzerland

TEVA

Israel

Sanofi-aventis

France

Panasonic

Japan

ON Semiconductor

USA

Foxcom

Taiwan

TYCO Electronics

USA

AU Optronics

Taiwan

Darfon

Taiwan

The project must be implemented in the Czech Republic outside the territory of Capital City of Prague.

Life Sciences

Technology Centres EE/Electronics

Cleantech

Source: CzechInvest, 2010

Potential Programme, Call III, open till September 30, 2011 Form of support

Statistics – technology centres

180 projects received the decision about subsidy Investment

Source: Potential Programme, Call I and Call II

EUR 175.2 mil.

Cash subsidy

Up to EUR 4-8 mil. (depending on region) Up to 60% of the costs of long term tangible and intangible assets

Impressive FDI Results

Cumulative FDI inflow by sector 1993 – H1 2010

Inflow of Foreign Direct Investment

Eligibility criteria

(Total 83.90 billion USD)

Trade, hotels and restaurants 12% Transport, storage and communications 13%

Real estate and business activities 18%

Electricity, gas, and water supply 5% Other 2%

Financial intermediation 24%

Manufacturing 26%

Source: Czech National Bank, 2010

Stock of inward foreign direct investment per capita (USD)

2006

2007

Czech Republic

7,800.4

9,989.4

Hungary

5,654.1

6,224.9

Poland

3,297.8

Romania Slovakia*

2008

Statistics – ICT and Business Support Services (app. data)

ICT and Business Support Services Programme, Call III, open till October 15, 2010 Form of support

7,308.5**

172 projects received the decision about subsidy

Cash subsidy

5,218.3**

Investment

3,514.2

3,895.3**

Newly created jobs

8,388.0

8,665.2**

2009

2010

11,189.7

11,460.7

11,834.9**

6,908.3

7,075.4*

4,680.1

4,286.4

4,789.9

2,110.2

2,923.8

3,194.4

7,031.7

7,456.9

8,405.9

Germany 22% Austria 14%

Business Support Services Centres

Cumulative FDI inflow by country 1993 – H1 2010

Other 27%

The project must be implemented in the Czech Republic outside the territory of Capital City of Prague.

(Total 83.90 billion USD)

Japan Sweden 1% 1% United Kingdom 1% Belgium 4% Switzerland 6% United States 5% France 7%

Minimum investment: large enterprise EUR 400,000, small or medium sized enterprise EUR 200,000

EUR 20.3 mil.

intangible assets

Source: ICT and Business Support Services Programme, Call I and Call II

Eligibility criteria

Services Surpass Manufacturing

Source: Czech National Bank, 2010

Up to 60% of two years wages or 60% of costs of long term tangible and

2,883

*Estimates, **Forecasts Source: Economist Intelligence Unit, July 2010

Netherlands 12%

Up to EUR 4-6 mil. (depending on region)

Minimum investment: EUR 118ths/EUR 39ths/EUR 20ths (Large/Medium/Small enterprise) Min. number of newly created jobs:

More value-added investment projects

1994

2009 Technology centres 45%

Manufacturing 19%

Performance of Foreign Companies in the Czech Republic Manufacturing 100%

Source: CzechInvest, 2010

Business support services 36%

Well-developed Domestic Supply Base

Basic Data Key information on the Czech Republic

Area

78,864 km2

Population

10.5 million

Labour

5.7 million

Capital

Prague

Language

Czech

Major cities (population)

Time zone

Source: Czech Statistical Office, June 2010

Czech economic indicators

Indicators

GDP (constant prices 2000, %) GDP per capita (PPS / EU-27)

http://suppliers.czechinvest.org Email: suppliers@czechinvest.org

Through filtering by sector, technology, products, region, company name and by full text, the databases enable fast and simple searching for suitable suppliers and partners from the Czech Republic.

2004

2005

4.5

2006

2007

2008

2009

2010 Forecast

2011 Forecast

6.3

6.8

6.1

2.5

-4.1

2.2

2.0

16,300 17,100

18,200

19,900

20,100

18,900

19,400

20,000

Long-term interest rates (government bonds)

4.75

3.51

3.78

4.28

4.55

4.67

3.7

3.9

Trade balance (% GDP)

-0.5

2.0

3.4

2.8

5.0

5.1

5.9

Average inflation rate (%)

2.8

1.9

2.5

2.8

6.3

1.0

1.5

2.2

537.4

514.3

474.8

392.8

324.6

465.6

525

508

9.2

8.97

8.13

6.62

5.44

7.97

9.0

8.7

Unemployment (avg., thousand persons)

CzechLink

GMT +1, summer time GMT +2

Unemployment rate (avg., %)

Source: Ministry of Finance, October 2010

Highly Developed Property Market

Attractive Investment Climate

Czech credit ratings

Rating Agency

Rating (August 2010)

Moody’s

Standard & Poor’s

Fitch IBCA

A+

Source: Czech National Bank, August 2010

The Czech Republic tops CEE countries in the competitiveness ranking of world economies

5.63

5.56

5.48 4.57

4.51

4.42

4.33

4.25

1 0 Singapore

Switzerland

Sweden

Hungary

Poland

Czech Republic

Slovakia

Slovenia

Source: World Economic Forum, Global Competitiveness Report 2010-2011

Standard rate of corporate income tax (%)

35 30

Investment Protection

Rents in industrial premises in regions €/m2/month Rent €/m2/month

Region

Central Bohemia

3.00–4.50

Hradec Kralove

3.50–4.00

Karlovy Vary

3.75–4.25

Liberec

3.50–4.00

Moravia-Silesia

3.00–4.50

Olomouc

3.75–4.25

Pardubice

3.50–4.00

Plzen

2.75–4.50

Prague

3.50–4.50

South Bohemia

3.50–4.50

South Moravia

3.75–4.75

Usti

3.75–4.25

Vysocina

3.75–4.25

Zlin

3.75–4.25

Source: CzechInvest, 2010

A class headline rents €/m2/month

Location

Prague City Center

2008

2009

Q2 2010

21–23

21–22

21–22 15–17.5

Prague Inner City

15–17.5

Prague Outer City

13–14.5

12–14

Brno

12.5–16

12.5–15

12.5–15 10–12.5

11–13.75

10–12.5

Plzeň

9.5–11

10.5

Olomouc

9–11.5

9–10

Hradec Králové

9–10.5

9–10

Ústí nad Labem

8.5–10

9–10

Ostrava

Source: DTZ, 2010 26

24 21

10 5 0 2003

2004

2005

2006

2007

2008

2009

2010

More than 91 Industrial Zones and Parks

17 15 12

1 Český Krumlov, 2 Prachatice, 3 Písek, 4 Blatná, 5 Domažlice, 6 Stod,

9 20

17 Rumburk, 18 Liberec, 19 Slaný, 20 Tuchlovice, 21 Kladno, 22 Unhošť, 23 Zdice, 24 Ž ebrák, 25 Zlatníky-Hodkovice, 26 Poříčany, 27 Zruč nad 7

Boleslav, 33 Jičín (2)*, 34 Hořice, 35 Vrchlabí, 36 Trutnov, 37 Kvasiny,

31 26 Praha 25

29 28

39 42

55 Brankovice, 56 Hodonín (2)*, 57 Staré Město, 58 Zlín, 59 Vsetín,

65 64

49 50

60 Holešov, 61 Valašské Meziříčí, 62 Hranice, 63 Velká Bystřice (2)*,

53 1

61 59 58

64 Olomouc (3)*, 65 Uničov, 66 Š umperk, 67 Mošnov, 68 Paskov,

62 63 60

46 45

40 67

38 41

50 Brno (2)*, 51 Pohořelice, 52 Mikulov, 53 Velké Pavlovice, 54 Vyškov (2)*,

number of supported zones in the given location.

Meziříčí, 47 Ž ďár nad Sázavou, 48 Bystřice nad Pernštejnem, 49 Blansko,

38 Chrudim, 39 Svitavy, 40 Moravská Třebová, 41 Ž dírec nad Doubravou, 42 Havlíčkův Brod, 43 Pelhřimov, 44 Kamenice nad Lipou, 45 Třebíč, 46 Velké

19 21 22 23

Sázavou, 28 Kutná Hora (3)*, 29 Kolín, 30 Velim, 31 Nymburk, 32 Mladá

12 Chomutov, 13 Most, 14 Lovosice (2)*, 15 Přestanov, 16 Ú stínad Labem, Source: CzechInvest, 2010

7 Plzeň (2)*, 8 Ostrov, 9 Podbořany (2)*, 10 Ž atec (2)*, 11 Klášterec nad Ohří,

18 16

75 74

72 70 71

International Memberships

Czech Technology Days

Students and graduates at technical universities

2001/2002 2002/2003 2003/2004 2004/2005 2005/2006

students graduates

Customs Obligations

41,567

48,302

52,070

56,712

3,941

4,257

4,731

5,485

6,397

2006/2007

2007/2008

2008/2009

2009/2010

62,975

65,562

66,304

80,245

8,397

11,876

14,198

17,109

students

37,333

graduates

Favourable Labour Costs

*Engineering, manufacturing and construction graduates Source: Institute for Information on Education, 2010

Labour costs per hour in 2009 USD

Visa Requirements

Czech Republic 13.19 Japan

Central Location in Europe and Advanced Infrastructure

23.41

United Kingdom

24.17

France

30.59

Germany

40.36

Source: The Economist Intelligence Unit, 2010

Central location in Europe

Infrastructure in the Czech Republic

Existing expressways

End of 2011

Planned highways

International roads Railway highspeed corridors

M ER

Helsinki

Oslo Stockholm

Berlin Hamburg

Leipzig Berlin Wolfsburg Erfurt Kassel Teplice

Česká Lípa

Kladno

Karlovy Vary

Dublin

Kolín

PRAGUE

Beroun

Budapest

Barcelona

Milan

Istanbul

Klatovy

Písek Strakonice

Prachatice

ČESKÉ BUDĚJOVICE

Jindřichův Hradec

Kroměříž

Blansko Vyškov

BRNO

Vsetín

Kosice Trnava

Zlín Uh. Hradiště

Hodonín Znojmo Břeclav

Český Krumlov

Vienna

Y Linz Steyr Graz

Source: CzechInvest, 2010

Nový Jičín

Prostějov

Jihlava

Tábor

Frýdek Místek

Athens

Bielsko - Biala Cracovie

Karviná

OLOMOUC

Havlíčkův Brod Žďár n. S.

Třebíč

Rome

Šumperk

OSTRAVA

Pelhřimov

Domažlice

Munich Ingolstadt Stuttgart Torino

Bern

Madrid

Ústí n. O.

Bratislava

Vienna

Lisbon

PARDUBICE

Opava

Svitavy Příbram

Marseille

Bruntál

Benešov

PLZEŇ

Tachov

Brussels Paris

HRADEC KRÁLOVÉ

Warsaw

Munich

Warsaw

Jeseník

Source: Road and Motorway Directorate of the Czech Republic, 2010

AUSTRIA

Bratislava Györ

VA K

Amsterdam London Berlin

Náchod

Nymburk

Rakovník

Sokolov Cheb

LAN

Trutnov

Jičín

Mělník

Louny

Würzburg Frankfurt

Semily Mladá Boleslav

Jablonec n. N.

ÚSTÍ N. L.

Most Chomutov

Copenhagen

Wroclaw Gliwice

Liberec

Děčín

Main Reasons to Invest in the Czech Republic Czech educational system meets the needs of a competitive economy (year 2010)

7 7.15 6

6.73

6.38

5.66

5.58

5.56

5.35

5.05

4 3

3.46

3.14

2 1 0 Austria

France

Germany

Hungary Czech Japan Republic Slovak Republic UK USA Poland

IMD Executive Opinion Survey based on an index from 0 to 10 Source: IMD World Competitiveness Online 1995-2010

100

87 85 71

Well educated and skilled labour force

Population that had attained at least upper secondary education in 2008 (% by age group 25-64)

Poland Czech Spain France USA OECD Republic Average Slovak Rep. Estonia Germany Italy Portugal UK

Respondents able to participate in a conversation in another language than their mother tongue

Proven Research and Development Capabilities

“Lonza Kourim Czech Republic is the leading technology and manufacturing service provider for biopharmaceuticals in Eastern Europe.”

Stephan Borgas, CEO of Lonza

69 67

61 57

51 42

30 20 10 0 Poland Finland Germany Czech Republic

EU25

Source: European Commission, Eurobarometer, 2006

(%)

Source: Education at a Glance, OECD Indicators, 2010

Testimonials from Successful Investors

France Hungary

Foreword by Martin Kocourek,

CzechInvest’s Services

Minister of Industry and Trade Dear Readers,

Martin Kocourek Minister of Industry and Trade

CzechInvest’s Services

Martin Kocourek Minister of Industry and Trade

Foreword by Miroslav Křížek, Chief Executive Officer of CzechInvest Dear Readers,

All of CzechInvest’s services are free of charge.

Miroslav Křížek Chief Executive Officer, CzechInvest

1 Foreword by CzechInvestâ&#x20AC;&#x2122;s CEO 2 Main Reasons to Invest in the Czech Republic 4 Attractive Investment Climate 6 Impressive FDI Results 7 Selected Investors 8 FDI Growth Sectors

Last update: November 2010

INVESTMENT OPPORTUNITIES

Investment Climate in the Czech Republic

CZECHINVEST HEADQUARTERS CZECH REPUBLIC

Stepanska 15, 120 00 Prague 2 PHONE: +420 296 342 500 FAX: +420 296 342 502 E-MAIL: fdi@czechinvest.org

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This material is distributed free of charge. Date of issue: November 2010

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